HomeIndustry SectorsFinance and PolicyMunicipal Energy Resilience progresses steadily in Western Cape

Municipal Energy Resilience progresses steadily in Western Cape

The six municipalities that will participate in the Municipal Energy Resilience (MER) Project in the Western Cape have now all signed the Memorandums of Understanding.

The MoU signing is the latest step in phase one of the MER Project following a readiness evaluation to determine which municipalities are most equipped and meet the conditions required to take advantage of the energy regulations to develop their own power generation projects and procure power from Independent Power Producers (IPPs).

The announcement comes as Eskom announced a return to loadshedding and the country was gripped by an icy cold front.

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Stellenbosch, Drakenstein, Mossel Bay, Overstrand, Saldanha Bay and Swartland Municipalities were announced as the municipalities taking part in the MER Project in the Western Cape earlier this year. The three-year MER Project, launched in 2020, is meant to support municipalities to take advantage of the new energy regulations to generate, procure and sell their own power.

 The Western Cape, through the provincial Department of Finance and Economic Opportunities, announced in early 2021 it will spend R48.8 million over the medium term and provide a further R20 million to the MER Project.

Municipal energy procurement will not happen overnight

David Maynier, Western Cape Minister of Finance and Economic Opportunity: “We will now be supporting and assisting these municipalities to ensure that municipal electricity networks are prepared to undertake pioneering renewable energy projects. The work will explore multiple pioneering renewable energy technologies and scales, cost options, scale of investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.”     

The MoUs with the municipalities were finalised alongside the publication of the City of Cape Town’s Request For information (RFI) asking potential private and public sector organisations, including Western Cape municipalities, to provide information on renewable energy projects which will assist in defining the potential projects that can be implemented in relevant candidate municipalities in the Western Cape.

“The RFI is aimed at development banks and multilateral development funds for projects that the City will own and operate, located in City-owned land and buildings (typically within the City distribution grid), ranging in size from less than 1MW to 100MW per project with the potential to explore larger-scale projects connected to Eskom’s network,” explained Maynier.

ESI Africa and Enlit Africa hosted a webinar unpacking the effect of the 100MW self-generation threshold increase on municipalities. You can watch it online.

Theresa Smith
Theresa Smith is a conference producer for Clarion Events Africa.